Although safety net organizations are eligible for some two-thirds of federal payment reform programs, fewer than 20% of these programs directly target the safety net.

ABSTRACT

Objectives: Safety net organizations face challenges under new value-driven payment models. More than 70 payment reform programs were created through the CMS Center for Medicare and Medicaid Innovation (CMMI). These programs were analyzed to determine the extent to which they target safety net organizations.

Study Design: Systematic review of publicly available CMMI program descriptions.

Methods: We reviewed all CMMI programs’ stated goals, eligibility criteria, participating organizations (if applicable), and all other relevant information publicly available on the CMMI website. We classified each program as (1) specifically targeting the safety net, (2) applying to the safety net but not specifically targeting it, or (3) not applying to the safety net. For safety net initiatives, we also reviewed each program to determine which portion(s) of the safety net it was relevant to.

Results: Only 13 CMMI programs directly targeted safety net providers, 32 included safety net providers, and 22 programs did not apply to or target the safety net. No trends were found to suggest that this proportion was increasing over time. Safety net–relevant programs tended to target critical access hospitals rather than primary care or behavioral health.

Conclusions: Programs that specifically target the safety net may represent an important opportunity to overcome unique payment reform challenges facing this portion of the healthcare sector. However, safety net organizations are inconsistently represented in CMMI programs. There is currently no expedient approach to determine whether CMMI programs apply to specific safety net subsectors. Additional clarity regarding safety net relevance may help organizations understand and participate in relevant CMMI programs.

The American Journal of Accountable Care. 2019;7(1):17-23

One potentially promising approach to improving value in healthcare is the use of alternative payment models (APMs) to fee-for-service (FFS)–based models.1 APMs include FFS payments that are linked to quality and value, gain sharing and/or downside risk, condition-specific population-based payment, and comprehensive population-based payment.2 Success under an APM requires transforming the manner in which care is delivered in a healthcare organization.1,3

Payment and care delivery reform pose significant technical and operational challenges for healthcare delivery organizations.4,5 However, not all healthcare delivery organizations are equally well positioned to respond to such challenges.6-9 Study results suggest that safety net organizations may not be well positioned to succeed under new payment models.6,9-11 A safety net healthcare organization is one that provides a significant level of care to low-income, uninsured, and vulnerable populations and has a legal mandate to serve patients regardless of their ability to pay.12 The safety net sector provides care to Americans who live in underserved areas.6,12

Safety net organizations face unique challenges that limit the success of payment reform initiatives. In addition to the challenges of patient attribution and risk adjustment, safety net organizations also have exceptionally high-cost patients.13-15 These challenges are further complicated by policy changes, such as Disproportionate Share Hospital funding streams that changed substantially for many safety net hospitals with the passage of the Affordable Care Act.9,11,16 These and other payment reform initiatives have traditionally put pressure on safety net hospitals owing to their unique missions, patient populations, and funding streams.7 Despite declining uninsurance rates, safety net providers persist as an integral source of care for many.17 Understanding the challenges and opportunities that payment reform presents for safety net organizations is of immense importance due to the size and scope of the safety net sector.6,12

Payment reform presents significant opportunities for achieving improved population health outcomes, improved patient experience of care, and decreased per capita costs.18 However, new payment models often carry high financial, technological, and personnel needs.11 Safety net organizations tend to have more difficulty meeting these needs compared with non–safety net organizations, especially the large start-up costs for new programs.6,9-11 Furthermore, advanced payment models often rely on strong, interoperable data systems, which may not exist in safety net organizations.19,20 Advanced payment models frequently place greater demands on personnel who may already be operating at maximum capacity within safety net organizations.13,21,22 Complex programs also require qualified staff, and safety net organizations often have limited access to the needed talent pool because of budget restrictions and geographic location.11 Because of these challenges, safety net organizations stand to benefit most from advanced payment models that not only apply to the safety net sector but are also specifically designed with these organizations in mind.23

Little empirical evidence has been compiled regarding systemwide trends in payment reform across the safety net.17 Safety net organizations generally derive large proportions of their revenues from public payers, such as state Medicaid programs, so recent payment reform initiatives from large private payers may not directly apply to safety net organizations.24 Likewise, the last remaining members of the recently concluded Pioneer Accountable Care Organization (ACO) program were not safety net organizations. Research suggests that although ACOs may be establishing new linkages with specific safety net providers, as of 2014 only 28% of ACOs included community health centers within their care networks.25 A centerpiece of payment reform efforts in the United States is CMS’ Center for Medicare and Medicaid Innovation (CMMI), which is home to some 70 payment reform programs. However, the overall extent to which safety net organizations are represented in these programs is not known, nor is it clear which of these programs are relevant for or directly target safety net organizations.

Given the large role that the safety net plays in delivering care to a range of underserved populations in the United States, it is crucial to consider how payment reforms may or may not be targeting safety net organizations. CMMI payment reforms are particularly relevant to safety net organizations because of these organizations’ strong linkages with public programs. However, no summary evidence is available to guide policy makers’ ability to determine whether current payment reform efforts generally target or include safety net organizations at levels that are comparable with their role in the US healthcare delivery system. Likewise, safety net organizations themselves may benefit from a comprehensive review of the applicability of all CMMI programs to their organizations. The goal of this analysis is to explore the landscape of CMMI payment reform initiatives to better understand the range of payment reform efforts currently under way and the implications for how safety net organizations are funded in the future.

METHODS

Defining the Safety Net

Safety net providers organize and deliver a significant level of healthcare and other health-related services to the uninsured, Medicaid enrollees, and other vulnerable patient populations.12 Although there is a lack of consensus on what specifically constitutes a safety net organization,26 we identified the safety net as including organizations serving vulnerable or underserved patients across 6 distinct but interrelated subsectors: federally qualified health centers (FQHCs), critical access hospitals, public teaching hospitals, community mental health centers, tribal health centers, and oral health providers who care for the underserved. The 6 subsectors are outlined in Table 1. These are not the only safety net organizations (others would include, for example, freestanding charity clinics), but they represent the largest portion of safety net providers.